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In Vizcaya Partners Ltd v Picard the Privy Council recently held that an agreement to submit to the jurisdiction of a foreign court can arise through an implied term, but there must be actual agreement (or consent). However, simply agreeing that an agreement should be governed by foreign law does not amount to agreement to the corresponding jurisdiction.

The experienced investor fund regime in Gibraltar has proven to be an extremely versatile way of setting up a fund within the European Union. In order to qualify for this regime, marketing must be restricted to investors who are deemed to be experienced under the Financial Services (Experienced Investor Funds) Regulations 2005.

With growing optimism that Gibraltar can expect a favourable ruling from the European Court of Justice in relation to its proposed new corporate tax structures and with forecasts of continued economic growth (both within and outside its financial services sector), the jurisdiction seems better placed than many to ride out the current global economic difficulties.

Spurred in part by the fiscal requirements of the European Union, Gibraltar’s decision to pursue a policy of low tax - rather than no tax - continues to make the jurisdiction attractive to international investors. Its appeal was enhanced by the announcement in the 2007 Budget of plans to reduce corporate taxes steadily over the next three years to an eventual target level of between 10% and 12%.

Reflecting Gibraltar's strong and continuing economic growth, the 2007 Budget provides a timetable for the long-awaited introduction of a low corporate tax regime. The government committed to achieving an across-the-board corporate tax of 10% to 12% by 2010, although the immediate 2% reduction in tax for tax-resident companies has disappointed local businesses.

Reflecting Gibraltar's strong and continuing economic growth, the 2007 Budget provides a timetable for the long-awaited introduction of a low corporate tax regime. The government committed to achieving an across-the-board corporate tax of 10% to 12% by 2010, although the immediate 2% reduction in tax for tax-resident companies has disappointed local businesses.

In a landmark ruling the Supreme Court of Gibraltar has confirmed that the appointment of provisional liquidators of an insurance undertaking based and regulated in Gibraltar constitutes the opening of winding-up proceedings for the purposes of Directive 2001/17/EC on the Reorganization and Winding-Up of Insurance Undertakings.

In a landmark ruling the Supreme Court of Gibraltar has confirmed that the appointment of provisional liquidators of an insurance undertaking based and regulated in Gibraltar constitutes the opening of winding-up proceedings for the purposes of Directive 2001/17/EC on the Reorganization and Winding-Up of Insurance Undertakings.

Following an oral hearing before the European Court of Justice (ECJ), the Gibraltar government is now awaiting the ECJ's decision on the country's proposed new corporate tax system. A key issue is whether Gibraltar retains fiscal independence from the United Kingdom and therefore has the ability to have a tax regime separate from that of the United Kingdom.

Continuing economic stability, together with substantially improved relations with Spain and sound prospects for success in a European Court of Justice ruling on proposed new tax measures, created a climate of optimism in Gibraltar at the end of 2006. Combined with existing legislation these factors will continue to strengthen the jurisdiction's attraction as a tax-friendly base for international business.

The Supreme Court of Gibraltar recently overturned its own previous judgment to hold that UK government departments can no longer operate in Gibraltar as if immune from claims for breaches of statutory duty or in negligence. The decision enables the Gibraltar courts to scrutinize the activities of UK government departments in a way that was not previously thought possible.

The development of Gibraltar's offshore trust business has been linked with the growth in its importance as a banking centre for private clients. Much of the initial trust work in this area developed as a result of Gibraltar's position as part of the Iberian Peninsula, but the use of Gibraltar trusts has now extended to clients from a fully international spectrum.

The optimism over Gibraltar's ongoing economic growth and the development of the jurisdiction as a leading and well-regulated finance centre continued in 2005, despite some uncertainty surrounding the final outcome of a legal ruling on Gibraltar's proposed new measures on corporate taxes.

Experienced investor funds are funds designed for professional, high-net-worth or experienced investors. Such funds are a niche area in Gibraltar - they do not have to go through the regular procedure for regulation and licensing, but are structured both to ensure adequate investor protection and comfort and to allow for expansion.

Although there are pressures on Gibraltar's fiscal resources, a small surplus of just under £3 million achieved in the 2004 to 2005 financial year has allowed the government to introduce several tax concessions, some of which will appeal to both local and overseas investors.

Gibraltar, the United Kingdom and the European Commission have reached an agreement over the tax-exempt status of Gibraltar-registered companies. Registered companies will have their tax-exempt status extended to December 31 2010. In addition, existing companies that change ownership before June 30 2006 can benefit from this status until December 31 2007.

Gibraltar's qualifying companies tax regime was dissolved pending an EU decision on transitional tax arrangements. The remaining qualifying companies will switch to the exempt companies regime at a cost of approximately £1.5 million annually to the Gibraltar government.

Finance Centre Director James Tipping has allegedly told 200 locally based firms that the European Commission may force the Gibraltar government to abolish the qualifying company tax regime. The government's position has been expected for some time, given that qualifying companies were never the subject of ongoing negotiations regarding the continuation of the exempt tax company regime.

The European Commission has confirmed that, in its view, Gibraltar's new proposed corporate tax reform measures are not compatible with state aid rules. The Gibraltar and UK governments have indicated that they disagree with the commission's decision. Accordingly, notice has been given that the decision will be appealed to the European Court of Justice.

The government of Gibraltar has revealed that it is proposing to increase the amount of tax paid by high net worth individuals. The proposals, which are in the consultative stage and are being circulated among members of the Finance Centre Council, will make amendments to the Qualifying (Category 2) Rules 1999 and Qualifying (High Net Worth) Individuals Rules 1992.

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The International Law Office (ILO) is a series of legal newsletters which provide expert legal commentary in the form of concise, regular news updates. ILO is written in collaboration with over 500 of the world's leading experts and covers more than 100 jurisdictions.